5 Highlights 4th Quarter 2016: In 4 th Quarter 2016 Eidesvik Offshore ASA had consolidated operating income of MNOK 209,4 (MNOK 343,2 in the corresponding period in 2015). The revenues in 4 th Quarter 2016 includes a termination fee of MNOK 35,3, (and in 4 th Quarter 2015 gain on sale of vessel of MNOK 92,8). Operating profit before depreciations (EBITDA) was MNOK 135,9 (MNOK 232,2), and operating profit (EBIT) was MNOK 215,6 after an impairment on the company s vessels of MNOK 303,5 (MNOK 115,6 after an impairment on the company s vessels of MNOK 290,0 in 4 th Quarter 2015). Net financial items was MNOK 138,3 (MNOK 84,4). Profit after tax was MNOK 353,2 (MNOK 202,3). News in 4 th Quarter 2016: Eidesvik and CGG have agreed to terminate with immediate effect the contract for Viking Vision that was due to expire end July Payment of the charter rate will continue until July 2017 as in the current contract. The vessel has been in lay up since medio July Eidesvik was awarded two contracts from CGG for the two seismic vessels Vantage and Veritas Viking. The vessels will be used as source vessels. The contracts, with commencement in January 2017, are 180 days each, with options. News after : Eidesvik is awarded a new contract with Siemens Wind Power for Acergy Viking. The contract is for 6 months with options. Contract commencement is June The vessel will be used as accommodation, service and maintenance vessel. Eidesvik is awarded a contract extension with Chevron North Sea Ltd for the supply vessel Viking Princess. The contract is one year firm with options. Eidesvik and CGG have agreed to change the contract for Viking Vanquish, which is firm to November 2020, with effect from January The dayrate for the rest of the contract period is reduced and Eidesvik receives listed notes and other debt instruments as compensation. The company has entered into an agreement for sale of the Subsea Vessel Viking Poseidon, the vessel will be delivered to new owner in 1st Quarter The sale results in a loss of MNOK 130, which is recognised as a vessel impairment charge in 4 th Quarter The sale will have a positive liquidity effect of approx. MNOK 180 after repayment of loan. Results per : The interim accounts are prepared in accordance with IAS 34. The interim accounts and corresponding figures for 2015 are not audited. The group s consolidated operating income per was MNOK 784,1, including termination fee related to the contract for Viking Vision of MNOK 35,3. (Total operating income pr was MNOK 1.238,9 including termination fee for the Vantage contract of MNOK 22,2 and gain on sale of vessels of MNOK 92,8). Operating profit before depreciation (EBITDA) was MNOK 415,3 (MNOK 770,3), and operating profit was MNOK 303,6 (MNOK 235,2) after an impairment of the company s vessels of MNOK 508,8 (MNOK 290,0). Profit from joint ventures of MNOK 82,4 (MNOK 77,0) is mainly related to operation of the two seismic vessels Oceanic Vega, Oceanic Sirius and the subsea vessel Seven Viking. Net financial items was MNOK 101,0 (MNOK 471,3). 5

6 Based on the weak and uncertain revenue outlook it is in 2016 decided to recognize an impairment charge of 7 supply vessels and 1 subsea vessels totaling MNOK 508,8. The assessment is based on value in use for the supply vessels and net sales value for the subsea vessel. The Board is aware of the low turnover for the type of vessels Eidesvik owns, and that there is some uncertainty regarding the values in the current market (see also note 5). Profit after tax per amounted to MNOK 403,8 (MNOK 239,9), whereof MNOK 393,5 (MNOK 196,9) was profit after minority interests. This gave a profit per share of NOK 13,05 (NOK 6,53). Balance sheet and liquidity per : Current assets per was MNOK 889,3 (MNOK 939,8), and cash balance was MNOK 547,7 (MNOK 702,3). Book equity at was MNOK 1.622,4 (MNOK 2.041,8), i.e. an equity ratio of 31 % (34 %). The total booked equity per share was NOK 53,81 (NOK 67,72). The corresponding market quote at Oslo Stock Exchange closed at NOK 6,19 (NOK 9,54). This represents a market value of MNOK 186,6 (MNOK 287,6). A fair value assessment conducted by two independent brokers, evaluate the consolidated part of the fleet value free of charter to MNOK 4.950,4, which indicates an excess value before tax of MNOK 1.244,0 compared to the book value of the vessels. The Board is aware of the low turnover for the type of vessels Eidesvik owns, and that there is some uncertainty regarding the values in the current market. Net interest bearing debt per was MNOK 2.890,0 (MNOK 3.129,7). Cash flow from operating activities per amounts to MNOK 282,1 (MNOK 640,0). Cash flow from investment activities of MNOK 55,6 (MNOK 706,8) is mainly related to costs related to received dividend from joint ventures, sale of vessel, yard stays and upgrades on vessels. Cash flow from financing activities of MNOK 492,2 (MNOK 219,5) consisted of ordinary payments of interest and installments on mortgage debt, and repayment of loan related to a sold vessel. Variation in the operation of vessels in 2016 compared to 2015: The subsea vessel Viking Neptun was delivered and commenced a contract primo March Compared to the previous year, the vessel has been operated on significant lower dayrate in The contract for the subsea vessel Viking Poseidon has been terminated in 1 st Quarter 2016, which has caused lower revenues than the previous year. The subsea vessel Acergy Viking has been without contract from January to August The cable lay vessel European Supporter was sold in 4 th Quarter The supply vessels Viking Prince, Viking Lady and Viking Athene have been operated on significant lower rates in 2016 compared to The two latter vessels were laid up in the fall The seismic vessel Veritas Viking has been without contract from January The seismic vessel Viking 2 was sold in 4 th Quarter The seismic vessel Vantage has been stacked since the termination of contract in 1 st Quarter

7 Financing: The next loan maturity apart from ordinary installments is the company s MNOK 300 bond loan with maturity 2 nd Quarter If the current market situation continues, the Eidesvik Offshore ASA Group will have to go through a financial restructuring. Market and future outlook: The PSV segment is still characterized of low rates on both short and long term contracts in spite of many vessels being stacked. Currently, it seems to be some time ahead before the market balances, and it seems necessary with a significant scrapping of vessels to restore market balance. We do not see any significant activity increase in marine seismic, and uphold our weak market view in this segment. In the subsea segment we see an increasing rate fixing level for vessels globally. We expect more activity within contract awards for field development and pipe lay which will be positive for the subsea segment in the long term. In the short term we expect a demanding market going forward, and do not see any imminent balance between supply and demand globally. 7

11 innebærer at fluktuasjoner i USD også medfører regnskapsmessige fluktuasjoner da denne eiendelen omregnes til NOK før den tas inn i konsernregnskapet. Egenkapitalmetoden anvendes på disse eiendelene, og effekten av fluktuasjonene blir behandlet som omregningsdifferanse i regnskapet. Etter balansedatoen vil en svekket USD medføre rapporterte valutagevinster knyttet til lån og valutaterminkontrakter i USD, men vil samtidig redusere verdien av (ikke regnskapsførte) langsiktige kontrakter i samme valuta. Konsernet har gjeld i USD og NOK, og er eksponert for svingninger i rentenivå. Konsernets renterisiko styres ved å inngå fastrentekontrakter og fastrentelån. Som følge av dette reduseres den økonomiske risikoen med høyere renter betydelig. For de neste kvartaler vil en renteøkning/ nedgang i pengemarkedene medføre noe høyere/lavere rentekostnad, men vil samtidig øke/redusere virkelig verdi av konsernets fastrentelån. Fastrenteandelen for lån i NOK er 31 %, og for lån i USD 0 % pr The group has its income mainly in NOK and USD, while the material operating expenses are in NOK. Therefore, the group is considerably exposed to fluctuations in the exchange rate of USD/NOK. To reduce this risk a considerable share of the group s debt is drawn in USD, and parts of the remaining USD liquidity surplus is sold forward. Two of the joint ventures have USD as functional currency. This implies that fluctuations in USD also results in accounted fluctuations as these assets have to be converted to NOK before recognized in the group s accounts. Currency translation adjustments have to be recorded as the group uses the equity method for recognizing these activities in the accounts. In the period following the balance date a weaker USD will result in reported foreign exchange gains related to debt and forward exchange contracts in USD, but will also result in reduced value of long term charterparties in USD (not recognized in the accounts). The group has a debt in USD and NOK and is exposed to changes in interest rate levels. The group s interest rate risk is managed through interest swap derivatives and fixed rate loans. As a consequence of this the financial risk of high interest payments is reduced. The following quarters an increased interest level will result in increased interest expenses, but will also result in increased market value of fixed interest loans. The share of loans with fixed interest is 31% for NOK loans and 0 % for USD loans per Markedsrisiko / Market risk For 1. kvartal 2017 vil kontraktsdekning utgjøre ca. 73 %, og for hele %. For 1st quarter of 2017 contract coverage is appr. 73 %, and for whole 2017 appr. 57 %. Nybyggsrisiko / Newbuild risk Konsernet har pr ingen fartøy under bygging. The group has per no vessels under construction. Kredittrisiko / Credit risk Konsernets kunder er i hovedsak solide selskaper med god betalingsevne. For de fleste kontraktsparter anses risikoen for at de ikke skal oppfylle sine forpliktelser som lav. Men vi ser at situasjonen i markedet gjør at risikoen har økt i forhold til tidligere. The group's customers are mainly solid companies with ability to meet payments. For most contract parties the risk for not fulfilling their commitments is considered low. However we see that the current market condition has increased the risk somewhat compared to earlier. Likviditetsrisiko / Liquidity risk Likviditetsposisjonen vurderes som tilfredsstillende de kommende 12 måneder, men antas å svekkes mot slutten av perioden. The liquidity position is assessed as satisfactory the next 12 months, however expected to weaken towards the end of the period. 11

13 Impairment tests of individual cash generating units (vessels) are performed when impairment triggers are identified. Based on the market conditions as of 31 December 2016 experiencing reduced freight rates, an increasing number of vessels in lay up and reduced market capitalization on the stock exchange, which is considered as impairment triggers. Impairment tests have been performed. When the book value of an asset exceeds the recoverable amount, impairment is recognized. The impairment tests in Q has mainly been based on value in use and net sales value for a vessel sold after the balance date. Recoverable amount is MNOK 1.411,1. In the assessment of the value in use, the expected future cash flow is discounted to the net present value by applying a discount rate after tax that reflect the current market valuation of the time value of money, and the specific risk related to the asset. The discount rate is derived from the weighted average cost of capital (WACC) for a market participant. Applied WACC is in the range between 7,5% 8,1%. Cash flows are projected for the estimated time of use, which may exceed periods greater than 5 years. The capital structure considered in the WACC calculation is based on assumed capital structure of an identified peer group with similar assets in a normal situation. The cost of equity is derived from the expected return on investment by the company s investors. The cost of debt is based on the terms in a loan agreement entered into in 2016, which is also marginally higher than the company s weighted average for all interest bearing debt, including bond debt. The beta factors are evaluated annually based on publicly available market data about the identified peer group and the OSEBX index of Oslo Stock Exchange. Other important factors reflected in the estimated cash flows are the long term inflation rate, the contractual situation (backlog), utilization, operating expenses, periodic planned maintenance (docking), freight rates and currency rates. The computations reflects the business conducted are within the tonnage tax system. No changes in other estimates materially influencing the interim results or balance have occurred. Incidentally, reference is made to the 2015 annual accounts for further information. Note 6 Utbytte / Dividends Det er ikke utbetalt utbytte i 2016 (2015: 0). No dividend has been paid in 2016 (2015:0). Note 7 Driftsegmenter / Operating Segments For andeler i felleskontrollerte virksomheter inkluderes inntekter, kostnader og avskrivninger i tabellen med en andel tilvarende konsernets eierandeler. The JV's income, expenses and depreciation are included in the table with a share corresponding to the group's owner shares. 4. kvartal 2016 Seismic Subsea Supply Other Total 4. kvartal kvartal kvartal kvartal kvartal kvartal kvartal kvartal kvartal 2015 Driftsinntekter/Operating income Driftskostnader/Operating expenses Avskrivninger/depreciation Nedskrivninger/Writedown on assets Driftsresultat inkl. FKV resultater/ Operating profit incl. JV profit Netto finans og skatt i FKV/Net finance and tax in JV Resultat TS/annen FKV / Profit from AC/ other JV Driftsresultat / Operating profit Antall skip ved periodens slutt (inkl. TS og FKV) Number of ships at end of period (incl. AC and JV) Seismic Subsea Supply Other Total Driftsinntekter/Operating income Driftskostnader/Operating expenses Avskrivninger/depreciation Nedskrivninger/Writedown on assets Driftsresultat inkl. FKV resultater/ Operating profit incl. JV profit Netto finans og skatt i FKV/Net finance and tax in JV Resultat TS/annen FKV / Profit from AC/ other JV Driftsresultat / Operating profit Antall skip ved periodens slutt (inkl. TS og FKV) Number of ships at end of period (incl. AC and JV) 13

Note 39 - Investments in owner interests Subsidiaries, associates, joint ventures and companies held for sale. Company Company number Registered fice Stake in per cent Investment in significant subsidiaries

Quarterly Report 1 st quarter 2002 Financial Results Roxar generated revenues of NOK 146,7 million in the first quarter 2002, compared to NOK 138,7 million in the preceding quarter and NOK 119,8 million